BEER (and Brands)!! IPA, SOUR, Coors, Miller, STELLA!!!
It seemed quaint several few years ago, when someone wanted a pumpkin brew for Halloween and asked my help in finding it. Pumpkin. How novel. But craft brewing is no longer novel. According to Fortune, “Craft beer volume represented just 1% of the overall beer industry in 1994 but stands at over 11% today.” Nonetheless, the recent merger action in beer makes the craft beer industry a bit nervous.
A key issue seems to be that the merger may cut off access to craft beers, because AB InBev has been buying up distributors. The fear is that at bars and retailers one would only have access to “Bud and Miller.” As Spencer Waller and I wrote, in Brands, Competition, and the Law, branding allows businesses “to move beyond price, product, place, and position and create the idea that a consumer should buy a branded good or service at a higher price than the consumer might otherwise pay.” As Susan Strasser has explained historically, national manufacturers used branding to overcome the “strong loyalties [customers had] to the people with whom they did business, which might surpass their interest in nationally advertised products that they had not yet tried.” At the same time, local retailers knew that national goods cut into their profits and often refused to carry these new goods. Which brings us to today and some questions about beer and brands and the law. Would changing the alcohol system help or hurt?
If consumers could buy directly from alcohol makers, would that blunt the force of a beer mega-merger? For that matter, what are the main markets for craft beers? Do distributors sell say a Georgia beer only within Georgia or a radius of the brewery? Would a craft beer maker even want a world without the three tier system? Wine seems to do OK with direct sales and distribution, so I am thinking beer and even craft spirits may like that option. But I don’t know.
Also it seems that the issue is not just about price. People may want to pay more for the craft beer but can’t get it. That seems to be an incorrect outcome. I am not a deregulate everything and wonders will flow person, but I think that this industry may be heading to much more flat organization and less regulation.
Those who know about alcohol making and selling, I am all ears. Until then I may have a beer and think on this one.